YOUNGER GENERATIONS EXPECT COMPANIES TO TAKE A STAND
OPINION ON THE IMPORTANCE OF TAKING A STANCE ON POLITICAL ISSUES WHEN IT COMES TO BUILDING
TRUST WITH CUSTOMERS AND EMPLOYEES
BABY BOOMERSGEN XMILLENNIALSGEN ZALL ADULTS49%37%22%32%32%38%53%68%58%56%NOT IMPORTANT IMPORTANTSOURCE: FORTUNE/MORNING CONSULT22 FORTUNE OCTOBER/NOVEMBER 2021With its abundance of top-rated
restaurants, bustling music scene, and
community of young professionals, Austin
seemed like an ideal place to relocate for Karyn
Lewis. A PR professional currently based in
Jackson, Miss., Lewis planned to take advantage
of the fact that her New York–based firm had an
outpost in Austin and move to the midsize
Texas city early next year with her partner.
“I think of Austin as kind of a hip-
pie city,” Lewis, 28, tells Fortune. “It
seemed like the easiest and the most
affordable move.” But the passage
of a controversial new law in Texas
that effectively bans abortions after
six weeks of pregnancy has Lewis
rethinking those plans. “We are now
looking at other options,” Lewis says.
“We’re moving from Mississippi, so
we are looking for something more
progressive, and this definitely seems
like a few steps back.”
The abortion legislation is far from
the only contentious new law passed
in Texas recently. During the most
recent legislative session alone, the
state moved to restrict voting rights,
allow residents to carry handguns in
public without a license, ban homeless
camps, and limit the teaching of criti-cal race theory in schools.
It’s all part of a grow-
ing partisan divide that
is spilling over from the
political realm and putting
large corporations in a
bind. States like Texas, Ari-
zona, Georgia, and Florida
have spent years wooing
Fortune 500 behemoths
with promises of lower
corporate tax rates, eco-
nomic incentive programs
that dole out cash or tax
breaks for relocating, and
a more affordable cost of
living for employees. Texas,
for example, welcomed
a number of California
refugees in recent years,
including the headquartersof Charles Schwab, Hewlett
Packard Enterprise (HPE),
and Oracle; Tesla is also
building a gigafactory
there. Meanwhile, Airbnb
is planning to open a tech-
nical hub in Atlanta, while
Spotify opened a major
oce in Miami.
Yet these same states
are simultaneously roll-
ing out laws that are an
automatic turnoff to many
young, liberal tech workers
and force companies into
damage-control mode with
socially conscious consum-
ers and ESG investors.
“You have a number of
companies recently that
have relocated to Texas
because it’s supposed to
be a friendlier climate for
business. And it’s suddenly
not as friendly as it was,”
says Anthony Johndrow,
cofounder and CEO of
consultancy Reputation
Economy Advisors.
Geographic cherry-
picking is actually a rela-
tively new phenomenon:
By and large, corporations
previously made location
decisions based on access to
their suppliers or proximity
to distribution locations,
says Brian Kropp, chief of
research in the HR practice
at Gartner, an advisory
firm. But in the past decade
or so, companies started to
make decisions based on
access to talent.
That meant several
Southern states started to
catch fire as corporations
grew tired of the high cost
of doing business on the
coasts. The Tax Founda-
tion rated California, for
example, as having the
second-worst business tax
climate in the country (NewTHE BRIEF POLITICS